Cutting on housing costs

At the peak of the housing market, prices were way too high.  I'll never forget trying to buy a short sale at the peak.  The only thing I could find was a "fixer upper" which needed major work for $240,000.00.  I thought I needed to buy it because everyone kept telling me prices were just going to keep rising and rising.  So I put an offer in.  Could I have afforded it?  No.  Not really, but I had been talking into it by my friend who was working at a mortgage company and she convinced me that they would make it work.  My payments would have been $1500.00 a month she said.  I pretty much would have been paying for the house and that was about it.  Well after putting in my offer, it was rejected and the bank said they wanted more money, even though we offered what the asking price was.  I really prayed and thought about it, and I had a feeling that it wasn't time to buy.  I really wanted to buy a house so badly.  It was the American dream.  Buy a house and live happily ever after. 

Years down the road, you see the current housing market.  Forclosures galore are all over.  I was watching the news yesterday and was told Las Vegas is the only area that the housing market hasn't started going up.  In fact, I bought my house a year ago ( which at the peak was $271,000.00) and it is showing that my house value has already gone down?  I don't know.  Kind of weird. 

For the past year I rented a room out to my sister to help out.  It was working out great untill she slowly started to be late on rent, or only having this amount or that.  I was patient with her and willing to work with her on it.  I know everyone is having hard times.  I also lost my job in January, so the rent surely was helping...well, at least when she was paying it. 

If you have an extra room in your house, a great way to help you out would be to rent out a room.  If you aren't using the space anyways, what would it hurt?  Just make sure it is someone that you trust and know.  Many people put ads up on craigslist or what not and they do fine with it.  For me though, having young children in the home, I would never put them in that kind of situation.  I made sure it was someone that I knew.  I did not charge my sister a deposit or cleaning fees or anything.  Some people might suggest that. 

Has anyone else had a room renting experience?  How did it go?